Correlation Between Citigroup and Gyldendal ASA
Can any of the company-specific risk be diversified away by investing in both Citigroup and Gyldendal ASA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Citigroup and Gyldendal ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Gyldendal ASA, you can compare the effects of market volatilities on Citigroup and Gyldendal ASA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Citigroup with a short position of Gyldendal ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Gyldendal ASA.
Diversification Opportunities for Citigroup and Gyldendal ASA
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and Gyldendal is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Gyldendal ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gyldendal ASA and Citigroup is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Citigroup are associated (or correlated) with Gyldendal ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gyldendal ASA has no effect on the direction of Citigroup i.e., Citigroup and Gyldendal ASA go up and down completely randomly.
Pair Corralation between Citigroup and Gyldendal ASA
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.52 times more return on investment than Gyldendal ASA. However, Citigroup is 1.52 times more volatile than Gyldendal ASA. It trades about 0.21 of its potential returns per unit of risk. Gyldendal ASA is currently generating about -0.07 per unit of risk. If you would invest 6,360 in Citigroup on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Citigroup or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. Gyldendal ASA
Performance |
| Timeline |
| Citigroup |
| Gyldendal ASA |
Citigroup and Gyldendal ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Gyldendal ASA
The main advantage of trading using opposite Citigroup and Gyldendal ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Gyldendal ASA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gyldendal ASA will offset losses from the drop in Gyldendal ASA's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Gyldendal ASA vs. Arendals Fossekompani ASA | Gyldendal ASA vs. Byggma | Gyldendal ASA vs. AF Gruppen ASA | Gyldendal ASA vs. Medistim ASA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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